Aid for Opel raises tension in coalition
November 23, 2009
By Sapa-dpa Berlin
The new German coalition government led by Chancellor Angela Merkel is in turmoil over the issue of state aid for Opel, while other EU states with Opel factories have pledged more than e1 billion (R11.2bn), according to a magazine report at the weekend.
The news magazine Der Spiegel said that ahead of a visit by new General Motors (GM) Europe chief Nick Reilly to Brussels today, Spain, Britain and Belgium had offered between e300 million and e500m each to help bring Opel back to profitability.
The UK had said aid of about e400m was feasible, Spain said it would find a similar amount, Belgium bid about e500m, and Poland had offered tax incentives. However, German Economy Minister Rainer Bruederle, of the liberal Free Democrats (FDP), repeated his opposition to offering GM government money for Opel.
This month GM controversially reversed its decision to sell Opel, and had said that it needed about $3.3bn (R25bn) in European state aid to fix the car maker.
Opel employs about 50 000 people in Europe, half of them in Germany. GM has voiced its intention to cut about 10 000 jobs across the company.
The FDP's opposition to state money for Opel, however, has brought the party into conflict with Merkel's Christian Democratic Union (CDU).
In the German state of Nordrhein-Westfalen, CDU state premier Juergen Ruettgers faces an election in May, and has urged state money to be spent to save jobs at the Opel plant in Bochum.
Reilly is due to meet with EU economy ministers and EU industry commissioner Guenther Verheugen, who is known to be against state help for Opel. Earlier this year the German government came in for criticism by the European Commission for offering financial assistance to Opel's erstwhile buyer Magna, because it would have involved fewer job losses specifically in Germany.
Verheugen told Der Spiegel that "state aid is an intervention in the market and, for that reason, ruled out. Exceptions can be agreed with the commission - as long as they are not connected with political preconditions. You can't connect it with the keeping of jobs in a particular location," he said.
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